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DURHAM, N.C. -- With chief financial officers' optimism about the U.S. economy at a five-year low, many are planning for reductions in capital spending and hiring. Their sour outlook stems from concerns about consumer demand, the rising cost of labor and high fuel costs.
These are some of the conclusions of the September 2006 Duke University/CFO Magazine Business Outlook survey, which asked CFOs from a broad range of global public and private companies about their expectations for the economy. The survey concluded Sept. 10 and generated responses from 959 CFOs, including 571 from the U.S., 208 from Asia and 180 from Europe. The survey of European CFOs was conducted jointly with RSM Erasmus University in the Netherlands. Results in this release are for the U.S. firms, unless stated otherwise.
The study's main findings are:
-- The level of pessimism about the U.S. economy is the highest in more than five years (see chart at bottom of release). Nearly half of CFOs are more pessimistic about the U.S. economy, and only 19.8 percent more optimistic, than last quarter.
-- Capital spending plans have been cut, with planned increases of only 5.1 percent over the next 12 months, down from a planned increase of 7.5 percent last quarter;
-- CFOs expect earnings to increase 9.4 percent …